10 April 2017

Boris Johnson pulls out of Russia visit due to Moscow’s Syria stance

Speaking following the cancellation of a planned visit to Moscow, the Foreign Secretary Boris Johnson said, “My priority is now to continue contact with the US and others in the run-up to the G7 meeting on 10-11 April – to build coordinated international support for a ceasefire on the ground and an intensified political process. We deplore Russia’s continued defence of the Assad regime even after the chemical weapons attack on innocent civilians. We call on Russia to do everything possible to bring about a political settlement in Syria and work with the rest of the international community to ensure that the shocking events of the last week are never repeated.” Johnson said that Rex Tillerson, the US Secretary of State, would nonetheless continue with a planned visit to Moscow to give a “clear and coordinated” message to Russia, but that the UK would call for a joint declaration from the G7 against Russia and “very punitive sanctions,” on which the UK has drafted a paper in preparation for a meeting of the group in Italy today. Meanwhile, Nikki Haley, the US ambassador to the UN, said, “The United States will no longer wait for Assad to use chemical weapons without any consequences. Those days are over. The United States took a very measured step last night. We are prepared to do more, but we hope that will not be necessary.”

Source: The Guardian The Times

42% of all voters would choose immigration control in trade-off with single market access versus 34% vice versa

A poll of 10,000 voters conducted by the Conservative peer Lord Ashcroft found that 42% of all voters saw immigration control as the priority in a potential trade-off with gaining access to the single market in Brexit talks, compared with 34% who thought the reverse. Leave voters split 66% to 13% on the same question, with Remain voters on 19% and 57% respectively. However, when asked to rank the importance of various negotiating outcomes without trade-offs, tariff-free trade came first on 73%, followed by halting EU budget payments on 71%, then freedom from ECJ judgements on 64% and immigration control on 61%. Within this, 85% and 80% of Leave voters chose ending EU budget payments and ECJ jurisdiction respectively as their most improbably issues, whereas top priorities for Remain voters were tariff-free trade on 74% and ending EU budget payments on 58%.

If Brexit negotiations were to deliver bad terms for the UK, 56% of all voters said that this would be due to intransigence on the part of EU countries, while 25% thought it would be due to ineffective negotiation by the UK government. Asked which political party best represented their views on Brexit, 45% said the Conservatives, 27% Labour, 14% UKIP and 14% Liberal Democrat.

Separately, a report published by the Leave Means Leave pressure group has called for annual net migration to be capped at 50,000 after Britain exits the EU. The report, written by UKIP’s former migration spokesman Steven Woolfe, also calls for the introduction of a work permit system, and a five-year suspension on unskilled migration. It has received backing from certain members of the Conservative party, including former Environment Secretary Owen Paterson and former Defence Minister Sir Gerald Howarth. However, it contradicts the Prime Minister’s message last week that the free movement of EU nationals may continue temporarily as part of an implementation period, and has been criticised by certain leave sources.

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EU could exclude UK from Australia trade talks to avoid revealing "sensitive information" prior to Brexit negotiations

The Financial Times reports that the EU could exclude the UK from upcoming talks on a trade deal with Australia due to concerns about “the treatment of sensitive information in the context of certain trade negotiations, to which the UK would continue to have access to while it remained a full member of the union.”

A source familiar with European Commission discussions said, “The question is to what extent Britain should be involved or informed or have access to ongoing negotiations when they are leaving because then they will proceed to conclude their own deals,” adding, “All our negotiations would clearly be for a market of 28, but we’re going to be a market of 27 down the line. It’s more that we should be aware of what’s going to come down the road in terms of strategy . . . We shouldn’t put ourselves at a disadvantage.”

A spokesperson for the UK government said, “The prime minister has made clear that the UK remains a member of the EU with all the rights and obligations that entails and we will continue to play our full role. We will of course be discussing our relationship with other countries as we always have.”

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EY ITEM Club calls for export investment as it upgrades UK growth forecasts

The EY ITEM Club has called for investment in export capacity as it revised up its UK GDP growth forecasts from 1.3% in 2017 to 1.8%, from 1% to 1.2% in 2018, and from 1.4% to 1.5% in 2019. Peter Spencer, the group’s chief economic adviser, said, “Although the starting gun for Brexit has just been fired, the UK economy has been adjusting to life outside the EU since the referendum… With unfettered access to the single market for now and a weaker pound, exporters are currently enjoying the best of both worlds. However, investment in new export capacity and the UK supply chain will be necessary to extend the recent strong performance of overseas sales after the UK has left the EU.”

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BoE advises firms against ignoring no-deal scenario in Brexit planning

In a letter to City firms, Sam Wood, the head of the Bank of England’s Prudential Regulation Authority, wrote, “Our current assessment is that the level of [Brexit] planning is uneven across firms and plans may not be being sufficiently tested against the most adverse potential outcomes — for example, if there is no withdrawal or trade agreement in place when the UK exits from the EU, and the UK and EU do not reach agreement on issues such as implementation periods, mutual recognition of standards, and co-operation in financial regulation or supervision.”

This comes as the Bank’s Governor Mark Carney said in a speech, “The outcome of the Brexit negotiations could prove highly influential in determining which path the global financial system takes,” making the case for a regulatory equivalence regime as the UK and EU were “ideally positioned to create an effective system of deference to each other’s comparable regulatory outcomes, supported by commitments to common minimum standards and open supervisory co-operation.” Carney also spoke of the “tremendous economies of scale and scope in clearing multiple currencies in one location,” as currently occurs in euro-denominated clearing in London, adding, “It has to be properly supervised, properly capitalised and have appropriate back-up mechanisms — we have all of those things. We will work hard with the European authorities to ensure that the appropriate amount of euro business continues to be cleared in London, quite candidly.”

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Government documents suggest trade will be prioritised over environmental issues in UK diplomatic efforts

The Times reports the contents of photographed government documents that include speech notes for Tim Hitchens, economic and consular affairs director-general at the Foreign and Commonwealth Office. The notes suggest a need to invest in Civil Service resource and for coordination between the Foreign Office and Department for International Trade. The speech, to be addressed to diplomats and trade negotiators alongside business figures at the Prosperity UK conference on April 26th in London, for which Open Europe and the Legatum Institute are acting as advisors, state, “You have a crucial role to play in posts in implementing our new approach to prosperity against the huge changes stemming from last year’s Brexit vote. Trade and growth are now priorities for all posts — you will all need to prioritise developing capability in this area. Some economic security-related work like climate change and illegal wildlife trade will be scaled down.”

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Salmond talks up Scotland's EU membership prospects

Appearing on BBC’s Andrew Marr programme, Alex Salmond, former leader of the Scottish National Party, said, “The Theresa May line – this is not the time or now is not the time – is not going to stand. It won’t necessarily crumble today or tomorrow or next week but over the next few months that line will crumble because no British prime minister can stand against the democratic wishes.” He added, “There’s been a sea change in attitudes towards Scotland. The British press always exaggerated the opposition [in Europe] to Scotland [becoming an independent member of the EU] , that was part of the campaign, but there can be no mistaking now the friendship towards Scotland and the key thing of course is as Scotland has gained influence the UK Government has lost influence. If you’re withdrawing as the UK is from the European Union you’ve got very little credit and very little credibility across the entire continent of Europe.”

This came as a cross-party group of 50 European parliamentarians, mainly MEPs, wrote a letter to the Presiding Officer of the Scottish Parliament Ken Macintosh and MSPs to assure them Scotland would be “most welcome” as a Member of the European Union. The letter states, “The question of Scotland’s constitutional future, and your relationships with the UK and the EU are for the people of Scotland to decide. It is not our place to tell Scotland what path you should take [but] … if Scotland were to become an independent country and decided to seek to maintain European Union membership, we offer our full support to ensure the transition is as swift, smooth, and orderly as possible.”

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